THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KURTZ: It wasn't supposed to be much of a race. Most of the media establishment basically ignored it, that is until the final days when the story suddenly became, "Oh, my god, the Republicans could actually win Ted Kennedy's Senate seat and block health care reform and change the course of American politics."

And when Scott Brown easily upset Martha Coakley in Massachusetts this week, there was a punditry explosion among the very same commentators who had basically written him off early on. Was this about Bay State politics or Barack Obama, his presidency?

(BEGIN VIDEO CLIP)

WILLIAMS: All the analysts were saying it was a shoo-in for the Democrats.

HANNITY: The sweeping victory by the GOP in the bluest of blue states no doubt has Democrats all across the country extremely worried about their chances for re-election.

GERGEN: Brown has turned this into a referendum on what's going on in Washington, especially with health care.

BOB SHRUM, DEMOCRATIC STRATEGIST: I mean, you have a candidate who took the election for granted, who waited too long to make a real argument, who said that Curt Schilling was a Yankees fan, Catholics shouldn't work in emergency rooms.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: So, she came off as aloof, detached, and voters felt it.

(END VIDEO CLIP)

KURTZ: So, are the meeting overdramatizing the impact of one Senate contest or playing catch-up on the seismic shift they missed?

Joining us now in Boston, Margery Eagan, columnist for "The Boston Herald" and co-host of "Jim and Marjorie" on Boston's 96.9 FM radio. And here in Washington, Jonathan Martin, senior political writer for Politico, who was in Massachusetts this week to cover the campaign. And Amy Holmes, guest co-host for "America's Morning News" on the Talk Radio Network.

Jonathan Martin, you were up in Boston. Didn't you, like everyone else in the press, initially assume that Martha Coakley would win this without breaking a sweat?

JONATHAN MARTIN, SR. POLITICAL WRITER, POLITICO: Howie, I was there in December for her primary. I left Boston then thinking, OK, that's the ballgame. Never thought I'd be back in the state in January.

Well, sure enough, Thursday night, got a ticket to Boston. Wednesday, too, by the way. I went up there. I'm not sure what's going to happen here. By Friday afternoon I was staying for the whole time.

KURTZ: But, was so that -- why did you underestimate it?

MARTIN: Oh, because I think, look, this is a state that has not had a Republican senator elected since '72, so you're talking about 38 years. It's been a very, very long time.

There have been governors there in the GOP, but never on the federal level. They just didn't think it was possible. Brown was a total unknown.

KURTZ: But were too many journalists blind to the anger and resentment out there that could fuel a Republican candidacy?

HOLMES: Well, I think that we have been seeing that. And even as early as May and June, we saw that Independents were moving away from Barack Obama and that there has been this building frustration that then exploded with the Tea Party movement over the summer.

But Howie, I might surprise you. I'm not going to bash the media too badly on this one.

There were 31 reasons why they weren't covering this, and that was 31 percent percentage points that Martha Coakley was ahead. But I will say that if you read the right-wing blogosphere, if you read "National Review" and "The Corner," or "The Weekly Standard," you started to hear rumblings that there was this Scott Brown guy who seemed to be chipping away at Martha Coakley's lead.

KURTZ: But many in the establishment press did not read those rumblings. And polls are ephemeral, especially in a special election, when you don't know who's going to turn out.

Margery Eagan, you like Martha Coakley. You asked her in an interview during the campaign how she felt about being called a lackluster, uptight bore. But for all the kicking around that -- for all the ways that she's been kicked around now, it would be hard to blame her defeat on bad press, would it not?

MARGERY EAGAN, CO-HOST, "JIM AND MARGERY": Well, she got very good press from "The Boston Globe," not from my paper, "The Boston Herald." But you know something? People don't like -- TV journalists and newspaper journalists do not like to talk about the influence of talk radio.

Let me tell you something. There was a nonstop hammering of Martha Coakley on the AM stations here, on the huge sports stations here. She was the evil incarnate and Scott Brown was the next coming.

And, you know, the New England Patriots in the playoffs lost early on. It was as if there was this transference from Tom "Terrific" Brady, the quarterback of the Patriots, to Scott "Terrific" Brown. You look at the rallies for Scott Brown, they were very white, they were very suburban, they were Gillette Stadium fans, and there was almost this...

KURTZ: But just briefly, did you mean to say earlier that "The Boston Globe" tilted towards Democratic candidate Martha Coakley, and your paper, "The Boston Herald," tilted towards Scott Brown in the news coverage?

EAGAN: Well, I would say my paper was pretty much cheerleading for Scott Brown. We're the conservative paper in town, and The Globe, I think, was -- they were evenhanded somewhat, but I think that they were definitely cheerleading for Martha Coakley, absolutely. They're the liberal paper in town. That's the way it always is.

But talk radio, I think...

KURTZ: Let me get Amy Holmes back in here.

EAGAN: ... was huge.

HOLMES: Sure. I think more damning of the media than not catching on to this story soon enough was the way the national media mischaracterized these candidates -- "The Boston Globe," you know, the big paper in Boston. Anyway, they described Martha -- sorry, Scott Brown -- as in the mode of the national GOP, which simply isn't true.

Scott Brown -- it took a University of Chicago professor to find out that he is a very liberal Republican. He's pro-choice. He actually got very high marks from the Teachers Union in Boston for 2005. When you saw it being discussed on the national stage, this was being discussed as if Scott Brown were a Tea Party representative which he doesn't even describe himself.

(CROSSTALK)

MARTIN: He's not moderate, though. I actually asked him that question directly, and he wouldn't say if he was a moderate or a conservative.

HOLMES: Labor and environmental groups also gave him high marks, teachers unions. That's not your traditional Republican.

KURTZ: Let me come back to the coverage, because...

MARTIN: Well, for up there he's a pretty conventional conservative.

HOLMES: For up there. That, I think, is the key word.

KURTZ: It is a northeast state and usually a blue state.

Hours after Scott Brown surprises the world and wins the Senate seat, Matt Drudge puts this headline on his Web site -- if we can throw it up there -- and says -- it's coming any second -- "Now Will He Run for President?"

And Brown holds a press conference, and one of the first questions is, "Are you presidential timber?" And listen to the way he is then described on the airwaves.

(BEGIN VIDEO CLIP)

KIRAN CHETRY, CNN: He got a rock star welcome yesterday from the press.

PAT BUCHANAN, MSNBC ANALYST: He's a real possibility for a future national ticket.

(END VIDEO CLIP)

MARTIN: Well, what's funny about this is that those folks there haven't actually talked to Scott Brown. And I was there on the ground, and I think he's an impressive enough guy. But it just sort of gets at some of the silliness here of having people who have never talked to the guy, interviewed him or seen him campaign say that he's sort of national, presidential material.

I'm just baffled by that, actually.

KURTZ: You're suggesting that journalists shouldn't think about things unless they actually have done any reporting and spoken to people?

MARTIN: It's hard to believe, Howie.

KURTZ: You've just undercut the entire basis for cable pundits.

MARTIN: Exactly.

KURTZ: Isn't this getting a little out of hand, Brown in 2012? He hasn't even been sworn in yet.

HOLMES: Right. I think it is getting out of hand. I think this is the media trying to generate a big, exciting story.

It is an exciting story just with the elements that we have, which is that a Republican was elected in Massachusetts and beat the Democrat who had a 31-point advantage. I don't think we need to be worrying about 2012 with this guy just yet.

KURTZ: Margery Eagan, is the Boston press buying into this Brown for president blather?

EAGAN: Oh, I would say that we're worked up into a fever pitch here in Boston. You know, most of us are mere mortals. It's not just Scott Brown, the gorgeous guy that you can't help liking he's so affable. But he's got this wonderful wife, he's got these two gorgeous daughters.

Ayla was a star on "American Idol." She's a big Boston College basketball star.

They are the central casting family. And I think we're whipped up into a total fever pitch over Scott Brown and the whole Brown family.

KURTZ: Well, Brown's wife, of course, Gail Huff, is an anchor on a Boston station.

EAGAN: Yes, she is.

KURTZ: And his daughter, Ayla, who had been a semifinalist on "American Idol," apparently is going to sing tomorrow on the "CBS Early Show." So it seems like the celebrification of Senator-Elect Scott Brown is fully under way.

(CROSSTALK)

KURTZ: Go ahead, Margery.

EAGAN: You know something else about Boston, though, I think that maybe the national press, because they're not here, has missed? There is such anger at the legislature in Boston.

We've had three speakers, Democrats in a row, hauled out practically in handcuffs. We've had three state senators, one of whom was on the front page of my newspaper, stuffing cash into her bra. I mean, and the Democrats -- and they dominate the legislature -- have done nothing about this. So there's a great deal of anger, I think, here at the Democrats in the state house in Boston that got deflected on to Martha Coakley.

KURTZ: That's why I love Massachusetts politics.

(LAUGHTER)

KURTZ: All right. Now, in terms of the impact or lack thereof on the Obama White House, a new "Newsweek" story out. Let's put up the cover.

The headline is "The Inspiration Gap." And Jon Meacham, the editor, who last week had Barack Obama on the cover as an author on a piece about Haiti, says that the president has to lead the country emotionally, as well as rationally, and he seems to be running the Brookings Institution. So, has this emerged now as we sort through the political damage as a new narrative about Obama, that he's just too cool, he's not connecting, and all that?

MARTIN: I think it was out there last year, Howie, but now it's cemented because...

KURTZ: It's on the cover of "Newsweek" now.

MARTIN: ... now he's taken some real hits at the polls.

Look, you can't spin away three straight losses -- Jersey, Virginia and Massachusetts, all three states that President Obama won in 2008. So, obviously, there is something going on there. They know they have a problem, which is why they're tossing out the sort of David Plouffe chum in the water today.

KURTZ: He, of course, former campaign manager for Obama who's now said to be taking a larger role, helping the administration on the outside in the 2010 elections.

HOLMES: But Howie, I think you're getting to a really important point here, is that the media is still focused on style. So we see Maureen Dowd had her column that Barack Obama is too much like Spock, aloof, detached from the American public. We see Barack Obama himself trying to defend himself with George Stephanopoulos, saying that he was just too caught up in the detailed policy nuances and he didn't explain and connect with the American people.

What the press is not covering is that the American people are looking at his policies. What about the substance? And that is what they're rejecting at the polls.

KURTZ: All right. I want to play a little sound from the debate that got a little bit heated on some of the cable channels as the Massachusetts race was heading toward its climax.

KEITH OLBERMANN, MSNBC: In short, in Scott Brown we have an irresponsible, homophobic, racist, reactionary, ex-nude model, tea- bagging supporter of violence against women and against politicians with whom he disagrees.

(END VIDEO CLIP)

KURTZ: Too far?

HOLMES: I can't even believe that was allowed on the air, frankly.

KURTZ: That's live.

HOLMES: It was so irresponsible. It's ugly, it's just completely unfounded.

And he's talking about the same voters, by the way, who voted for Barack Obama, 62 percent who elected Deval Patrick, an African- American, for governor. And he's saying in one year they've turned into a racist because they don't support Martha Coakley? That doesn't make sense.

KURTZ: The next night, after Jon Stewart made fun of him, Olbermann came back and said he had been a bit over the top lately, point taken, sorry.

And Margery Eagan, I've got one for you. Here's the comedy styling of Glenn Beck, actually -- and I don't want to make light of this -- he's invoking the tragedy of the woman who had worked for Gary Condit, whose name...

(CROSSTALK)

KURTZ: This is what he had to say, Glenn Beck, talking about Scott Brown.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS: I want a chastity belt on this man. I want his every move watched in Washington. I don't trust this guy. I'm just telling you.

UNIDENTIFIED MALE: It's just a creepy moment.

BECK: This one could end with a dead intern. This one could end with a dead intern.

(END VIDEO CLIP)

KURTZ: Margery Eagan, your reaction to that?

EAGAN: Listen, I think Glenn Beck and Keith Olbermann have both taken leave of their senses. You know, I was a Martha Coakley fan. I thought she was a great D.A. But I know Scott Brown. He's a great guy. You can't help but like the guy.

He strikes me as a wonderful family guy. He's out there mowing the lawn. His wife, Gail Huff, has been a great reporter on Channel 5.

Racist? A homophobe? Sexist? I mean, this is crazy. His politics are different than mine, but it's sick.

MARTIN: Isn't it schtick, Howie?

KURTZ: Yes, but at what point does schtick become irresponsible schtick?

MARTIN: Fair enough. Yes.

HOLMES: I think Keith Olbermann well passed that point with that commentary.

KURTZ: All right.

The one big winner here, "The Boston Herald." Everybody saw that picture of Scott Brown holding up The Herald with -- there it is. He did it.

KURTZ: Journalists have one basic mission, to gather the news. Doctors have very different mandates -- to heal the sick. But in the aftermath of the devastating earthquake in Haiti, there are some who have tried to do both. Call it "The Sanjay Syndrome" for the most prominent practitioner, Sanjay Gupta.

The television doctors landed in Haiti, covered the tragedy for the networks. And in between their live shots, put on scrubs and got to work.

(BEGIN VIDEO CLIP)

SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: She is doing very well after the operation, and then eventually a helicopter flew (INAUDIBLE). So this is just one story. This girl is really a delightful young gal who is going to do very well from this operation, but it is part of a larger issue.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So you were actually involved with some of the patients?

DR. NANCY SNYDERMAN, NBC: Yes, I saw as many patients as I could. I took off one hat and put on another, everything from a mom who gave birth yesterday and was worried about a child's bellybutton, to fractured jaws, to a young man -- I don't know if he'll make it -- badly broken arm, open wound, gangrene already setting in.

(END VIDEO CLIP)

KURTZ: So, is there a conflict between reporting on a tragedy's victims and trying to help them? I spoke earlier to one network's medical correspondent from her post on the front lines in Haiti.

(BEGIN VIDEOTAPE)

KURTZ: Nancy Snyderman, welcome.

SNYDERMAN: Hi, Howard.

KURTZ: Thank you for joining us from Haiti. As a doctor, as a journalist, as a human being, what has it been like to be in the middle of all this death and devastation?

SNYDERMAN: I told some people here to me this is Mogadishu plus Katrina, except there aren't as many guns and the people here don't want to kill us. But there's a lot of desperation. It's tough.

I've seen things that, frankly, my surgical background didn't quite prepare me for. And I know there's been a lot of controversy of the role of physician journalists here. But you can't help but wear more than one hat. I think one as a humanist and one as a surgeon, and obviously I'm here as a journalist. But all three of those things have come crashing together this week.

KURTZ: Well, let's talk about that.

As a journalist, obviously you are covering the story. As a doctor you have become part of the story.

Do you see those two things at least partially being in conflict?

SNYDERMAN: Well, sure. I think, ethnically, I question all of it.

And I came here to cover this for NBC. Let's be very clear. I didn't come here to be a heroine of any sort. I came here as a journalist for NBC News.

And I was trying to track down this one little place, a Catholic charity, where I thought I had made some connections. And connections -- making connections here is virtually impossible.

And when I walked in, the first question that was asked of me is, "Are you a doctor?" And I said yes. And they said, "We need you," and they took me by the hand in the soccer field that was part of this little community house.

There were scores of people who needed medical attention. I mean, at that point, the journalist hat went off and the doctor hat went on. And I really had one role, and that was to triage the just dinged and lightly hurt to get out so there could be space for those who were really hurt, to declare who was dead or dying and put them to the side and cover them to keep the flies off of them. And those people where I could make a difference, my job was to tend to them.

At the end of that, because there is no end here, I had to go back. So, then, that's the conflict.

KURTZ: But there was no question in your mind when they said, "We need you," you're a doctor, that you were going to start tending to patients?

SNYDERMAN: Oh, there was no question. I mean, look, before I became a journalist I was a physician. I wanted to be a doctor since I was in third grade. That is, at the end of the day, who I am. So, to walk by somebody who needs me, to not operate on somebody -- but I think we have to underscore something. When you've heard of us all operating here on the field, including Sanjay, this is not like we're home operating on people. This is rudimentary.

We may call it surgery, but it is glorified first aid in the field. We don't have the equipment we would normally have. We are tending to people the best that we know how. But as sophisticated as we might be on our home turf, this is not sophisticated, what we've been able to do this week. The sophisticated medicine is happening at the Israeli hospital and at the U.N. hospital and on the Comfort, but we've done the best battlefield medicine we know how.

KURTZ: And is it frustrating for you to have to operate under those somewhat primitive-sounding conditions?

SNYDERMAN: You know, it's interesting. It's frustrating because you know you could do better, but it takes you back to that skill set of being a very basic healer. You do what you can.

I've operated in a lot of countries over the years, and I've realized you can sometimes do with much less.

The problem here is we don't even have the basics. I mean, I was using suture kits as surgical instruments. There aren't enough things to set bones with. I'm not an orthopedic surgeon.

So I have not diluted myself, but I have lost a lot of sleep here because I have left people in precarious situations. And the problem is there's no way not to do that, because this is not a place where you can come in and cure someone in the field. You can come in and intercede, and I think one of the ethical questions I wrestle with is, when I intercede, am I making someone better or am I prolonging their misery? And I don't know that I have a clear answer for that.

KURTZ: That is a very, very difficult question to grapple with.

Now, you mentioned CNN's Dr. Sanjay Gupta. He was really the first to do this in Iraq, to go there on a reporting trip and end up treating patients. He's doing this in Haiti. CBS' Jennifer Ashton is doing it. You're doing it.

SNYDERMAN: And Rich Besser is here from ABC News.

KURTZ: And I hear some people say -- I don't necessarily agree with this, but I hear some people say, is this self-promotion? Why are these people doing it in front of the cameras?

SNYDERMAN: Well, I think there can be grandstanding. And if there is an element of that, it's appalling.

It's not what I came here to do, but I worry. I mean, I have thought about it.

I mean, is my job here to treat people and say look at me? I would say the answer is emphatically no.

Is my job here to treat people and help people who happen to be in my line of sight? Yes. The answer is emphatically yes.

But where I become a journalist and where I meld that with being a doctor, I think that is the juxtaposition that we all have to wrestle with.

If I tell the stories through the eyes of a physician, and I tell those stories to millions of people, do I help more people in the long run? I guess at the end of the day I have to believe the answer is yes or I shouldn't be doing this. But there are gray areas every day, Howard, and it's those gray areas that I think all of us who are here wrestle with.

KURTZ: I've got about half a minute.

You are helping to heal people in this terrible tragedy, trying to help save lives. Does the criticism bother you?

SNYDERMAN: No. It makes me think. It gives me pause.

Are the critics right? And I guess the best thing I could ask of the critics is come here and walk in my shoes for a day and tell me if you would walk by somebody who has a bone sticking out of his arm. If you would walk by it, then I guess we're just different people.

KURTZ: Dr. Nancy Snyderman, thank you so much for joining us from Haiti.

SNYDERMAN: Always, Howard. Thanks.

(END VIDEOTAPE)

KURTZ: And we appreciate her taking the time to join us.

Coming in the second half hour of RELIABLE SOURCES, PR victory. Jay Leno may have won the battle for "The Tonight Show," but he got clobbered in the PR war. Is that fair? And does the suddenly wealthy Conan have a late-night future?.

Plus, belated confession. John Edwards finally stops lying about the baby he fathered. Is it time for journalists to take "The National Enquirer" seriously? The tabloid's editor will be here.

(COMMERCIAL BREAK)

KING: I'm John King and this is STATE OF THE UNION. Here are stories breaking this Sunday morning. In a new audiotape allegedly from Osama bin Laden, the al Qaeda leader claims responsibility for the Christmas Day attempt to blow up a U.S. airliner en route to Detroit. Earlier on STATE OF THE UNION, White House senior adviser David Axelrod told me its message contains the same "hollow justification" for the slaughter of innocent people.

One day after search efforts were officially called off in Haiti, a remarkable story of survival. Twenty-four-year-old Wizman Jean Pierre (ph) was pulled from the rubble of a four-story building Saturday after being trapped for 11 days. He was severely dehydrated but, amazingly, had no serious injuries. Jean Pierre says he survived on beer, cola and cookies.

A looming deadline for General Motors and Chrysler dealerships across the country. Nearly 3,000 dealers got the ax as part of the auto giant's bankruptcy proceedings. They have until tomorrow to appeal their closure. Nine hundred of them already have.

Independent arbitrators will take up their cases and decide whether those dealers are profitable enough to stay open.

Those are your stop stories here on STATE OF THE UNION.

KURTZ: Jay Leno didn't ask to be taken off "The Tonight Show" and moved to 10:00. Leno didn't ask to have his primetime show canceled and returned to 11:30, bumping Conan O'Brien out of the coveted timeslot. But somehow in this late-night soap opera, Conan cast himself as the victim and Jay came to be seen as the bad guy.

So, this week, he dropped the jokes -- well, some of them -- and told his side of the story. None of this, said Leno, was his idea.

(BEGIN VIDEOTAPE)

JAY LENO, "THE JAY LENO SHOW": They said, well, how about prime time? I said, well, that will never work. They said, no, no, we want to put you on at 10:00. We have done focus groups, people will love you at 10:00.

KURTZ (voice-over): Four months later it was over.

LENO: OK. So they come and they go, "Listen, this show isn't working. We want to let you go." "Can I get out of my contract?" They go, "No, you're still a valuable asset to this company."

How valuable can I be? You fired me twice. How valuable can I be?

Through all of this, Conan O'Brien has been a gentlemen. He's a good guy. I have no animosity towards him.

This is all business. You know, folks, if you don't get the ratings, they take you off the air.

KURTZ: Something about Leno's defense ticked off his old rival David Letterman, who lost out on "The Tonight Show" 17 years ago. DAVID LETTERMAN, "THE LATE SHOW": What we're seeing now is kind of vintage Jay, and it's enjoyable for me to see this. It's like, hey, there he is. There's the guy I know.

Five years ago, when NBC said to Jay, you know what, Conan is going to take over your job in five years, that's when you say, OK, fine, no hard feelings. You call ABC, you call Fox, you try to get my job, you leave.

You don't -- hey, OK. But I'll be in the lobby if you need me. Don't hang around.

(END VIDEOTAPE)

KURTZ: Conan, meanwhile, won a huge payoff from NBC before ending his run Friday night, $32 million just to go away and stay off a competing network until September, plus another $12 million for his staff.

So, should Leno be blamed for this debacle, and will that hurt him when he returns to the old neighborhood?

Joining us now in Los Angeles, Ray Richmond, former reporter for "The Hollywood Reporter" now a contributor to TheWrap.com; Rachel Sklar, editor-at-large for Mediaite.com; and here in Washington, David Zurawik, media and television critic and blogger for "The Baltimore Sun."

Ray Richmond, why did Leno feel the need to make that defense that we just saw? How did he become the bad guy in this?

RAY RICHMOND, FMR. REPORTER, "THE HOLLYWOOD REPORTER": Well, Howard, he was being attacked from all sides, and rightly so. You know, Jay always has to come off as the good cop. It was that way going back to the Helen Kushnick days when he had his manager as the attack woman on everyone.

And now, of course, it's always got to be victim Jay. And he's already pandering for the public sentiment for when he comes back on March 1st. But it doesn't mean that what we're seeing is anything close to real.

I just love the lack of civility in this whole thing. It's just been a wonderful, juicy soap opera, that these guys have just dropped the gloves and just attacked the crap out of each other.

KURTZ: And seeing them bloody each other has been kind of entertaining for the rest of us, David Zurawik, but look, Conan O'Brien tanked, even before Leno's primetime show went on. I mean, he ended up losing nearly half "The Tonight Show" audience.

How is that Jay Leno's fault?

DAVID ZURAWIK, MEDIA AND TELEVISION CRITIC, "THE BALTIMORE SUN": Well, it's -- well, in a way, we don't know how much Jay's problems at 10:00 -- we know they contributed to the... KURTZ: Oh, sure.

ZURAWIK: So, there was a train wreck effect. And that's really what gives Conan some coverage on this.

You know, ,you say, well, he only had seven months and he had this train wreck happening in front of him. But I don't think -- you know, Jay Leno, I don't think, is the villain in this piece. He's a tool. You know, that's not a good thing. That's not a good thing.

KURTZ: Why is he a tool?

ZURAWIK: Because Zucker, the president of NBC, who thought this crazy idea up, should be the villain in it. And he used Leno, and Leno let himself be used, and he was a tool, maybe a worm. OK?

KURTZ: OK.

ZURAWIK: But I'm not going to say that he's the villain. That's too simple.

KURTZ: You decide on the terminology.

Here's "New York Observer," this cover, not a very flattering picture of Jay. Inside, the headline is "Leno, the Lonesome Loser."

So, Rachel Sklar, there have been rallies around the country for Conan O'Brien. He's the hip, young comic. But look, NBC executives say they were losing tens of millions of dollars with Conan on "The Tonight Show," which is why they were willing to pay him so much money to go away.

So, again, it seems to me that Leno is getting unfairly beaten up when these were not his decision.

RACHEL SKLAR, EDITOR-AT-LARGE, MEDIAITE.COM: Well, I would hardly call Jay Leno naive. He certainly knew -- he had the biggest range of options of anyone here. He had five years to figure out what he wanted to do. What he decided to do was stay at NBC while Conan took over and have a sort of shadow government set up and wait in the wings until who knows what happened. And in the meantime, he also negotiated a bigger poison pill penalty for his own cancellation.

So, I wouldn't call...

KURTZ: And by the way, Conan O'Brien had a poison pill penalty. If he was taken off "The Tonight Show," he had to be paid $45 million.

SKLAR: The reason he had the poison pill penalty -- the reason he had that penalty was to ensure that NBC would not do this. The whole reason he had that was to give Conan comfort that NBC would actually go through with their promise because NBC wanted to keep Conan from exploring his own range of options.

KURTZ: Right.

SKLAR: So that's the reason for Conan's poison pill.

KURTZ: It seems standard practice to me in the network, because this was just a tough negotiating...

RICHMOND: NBC never had any intention of leaving Conan on the air for very long. A year before the thing ever kicked in, you knew they would have gotten out of it if they could. They kept Leno there because they knew that Conan couldn't compete at 11:30 against him in their mind.

KURTZ: You're saying they used Jay as an insurance policy.

SKLAR: In their mind.

KURTZ: All right.

ZURAWIK: But Ray, what do you base that on and say they never had any intention of leaving Conan on the air? What do you base that on?

RICHMOND: The fact that they had Jay waiting in the wings there at 10:00. They knew that he could never, ever compete at 11:30 against Jay, otherwise they would have let Jay go.

But I think that critics tilted toward Leno because most of the critics, they like Conan, he's the hip, edgy comic. They think Jay is inoffensive, bland, middle of the road, and he just lost the PR war here.

I do think that Conan O'Brien...

SKLAR: I disagree, Howie.

KURTZ: OK. Well, we'll come back to you on that in a second. I want to play some sound here.

I do think that Conan O'Brien went out with a touch of class on Friday night. He said some nice things about NBC. Let's take a brief look at that.

(BEGIN VIDEO CLIP)

O'BRIEN: Every comedian dreams of hosting "The Tonight Show." And for seven months I got to do it. And I did it my way, with people I love. I do not regret one second of anything that we've done here.

(END VIDEO CLIP)

KURTZ: So, Ray Richmond, should anyone feel sorry for Conan O'Brien now with this zillion-dollar settlement which includes keeping his mouth shut about NBC for the next seven months?

SKLAR: I don't think anybody feels sorry for him because his position is much better now than he ever was. He's emerged sort of as a leader here, and it's not a matter of money. But I don't think...

KURTZ: Well, professional pride is -- let me get Ray in on this.

RICHMOND: Let me just say that I'll stay off of RELIABLE SOURCES for far less than that for seven months, Howard. You know, you could give me $3 million and I won't come back for seven months.

KURTZ: How about $300?

RICHMOND: Let me just give you a readout of why we shouldn't feel sorry for Conan.

KURTZ: How about a couple of dinners?

RICHMOND: He made $1.75 million a week, $335,000 an hour, $3,900 a minute during his tenure on "Tonight" -- $81.67 a second.

ZURAWIK: Howie, I've got a problem with that final thing of NBC. Here's what I didn't like about what Conan did.

He stirred. He stuck his hand in and stirred up sort of anti- corporate anger in America. Stupid corporations mess up and then they lay you off. That was really made him almost...

KURTZ: But now taking responsibility for the fact...

(CROSSTALK)

KURTZ: Yes, it happened, but, you know, most people don't even get seven months to prove themselves. They get 13 weeks.

David, I want to ask you this -- Letterman, why is he screaming about Leno? What's he got to be mad about?

ZURAWIK: I think it's residual hatred. It was devastating. It was devastating.

SKLAR: It was a voice of experience.

KURTZ: And Rachel Sklar, you've been hanging out at these Hollywood parties. What is the buzz about Leno and whether it's below the belt for him to be making jokes about Letterman's sex scandal and doing the intern and all that?

SKLAR: Listen, Letterman's sex scandal is fair game, just like Jay Leno's antics are fair game and NBC is fair game. However, Letterman's wife is not fair game. Taking a shot at her is a really low blow, and that is unfair collateral damage. If anything made Leno made Leno look like not the good guy, that shot at Letterman's wife was the thing.

KURTZ: I do think that was very much at odds with Jay's carefully cultivated...

RICHMOND: I love the fact that everything was fair game in this.

KURTZ: Well, yes, sure. But, I mean, I do thinking talking about -- the joke was, how do you get Dave Letterman not to pay attention to you? Marry him. And I do think that was at odds -- let me finish, Ray.

RICHMOND: And there was a time -- like Leno pays attention to his wife.

ZUCKER: You know -- I was going to say, obviously in hindsight, you know, perfect information leads you to that conclusion, that it was a mistake. And I think it's the sign of a leader to step up and say when something is not working, to have the guts to reverse it.

(END VIDEO CLIP)

ZURAWIK: Only the head of a network could try to spin this, and he's a hero and he's a brave man for stepping up after this debacle. And you know, by the way, Zucker and Ebersol, Dick Ebersol, also a high NBC executive, they really came out this week and went after Conan. And, you know, ,when they said...

KURTZ: Ebersol trashed Conan on the record.

ZURAWIK: Yes. Yes, this was -- and I think they might have even scared him a little bit and said, this is what we can do to your reputation, man. You're messing with this corporation's brand right now.

KURTZ: Ray Richmond, Leno is going on "The Oprah Winfrey Show" this week, he probably made a mistake, in my view, by not speaking out earlier, at least to give his die of the story.

Is there a real possibility now that he goes back to the old time slot, takes over "The Tonight Show" at 11:30, that he's going to be tarnished and that some viewers are not going to return?

RICHMOND: I think he's going to be tarnished temporarily. I think Rachel and I might have a disagreement on this, as we were in the room earlier talking.

I think people have very short memories. I think he's going to come back, and enough people will -- you know, people, when they're falling asleep at night, are not thinking, is this a good person, is this a bad person? All they're thinking is, is that joke going to make me laugh? And I think he's going to probably come back just fine, and he'll keel over in that studio. I mean, the guy is going to -- they're going to have to cart him out on a gurney when he's 85.

KURTZ: Rachel?

SKLAR: You know, I think that what you saw with the last night of Conan was a lot of goodwill. You had Neil Young come on and thank him for being a supporter of new music. You had all these people coming out for him.

I think that those subtle, you know, acts of goodwill will have a reverse effect on Leno. I think he will definitely not see Tom Hanks rushing to sit at his side anytime soon. There's just a feeling of -- you know, that he did the wrong thing here, that he was not a good guy. And I think that certainly the younger generation does not like Leno.

KURTZ: OK. All right. Well, we'll see about that.

SKLAR: And so when you see the demographics shift...

KURTZ: But, you know, Jay did bring in the mass audience.

But the thing is -- and Conan's ratings soared, of course, at the very end -- we all sit around saying, oh, this is so terrible. They are really going after each other with knives. But they've never been funnier.

Did you hear what he said last night? So, when they talk about something real, where they're really emotionally invested, it's made for great comedy.

ZURAWIK: It has. And, you know, the Thursday night, the second last show with Robin Williams, when he came on and really tapped into that corporate resentment, that was the most exciting late-night comedy I've seen.

And I was actually mad at Conan. I thought, why didn't you bring this kind of edge and passion to it the last seven months? This is the great...

SKLAR: Oh, I don't know. Did you see that montage, the surrender montage? That was, like, some pretty edgy stuff. Conan never didn't put himself out there.

After the break, love child journalism. "The National Enquirer" trounced the mainstream media in breaking the John Edwards scandal. Now some are talking Pulitzer?

The Enquirer's executive editor is up next.

(COMMERCIAL BREAK)

KURTZ: Let's face it, we all knew he was lying. His story just didn't add up. But when John Edwards stopped denying "The National Enquirer" story that he had a affair with a former campaign aide, he did keep denying one part of the story to ABC's Bob Woodruff.

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), FMR. SENATOR: I would welcome participating in a paternity test. I would be happy to participate in one. I know that it's not possible that this child could be mine because of the timing of events. So I know it's not possible.

Happy to take a paternity test.

(END VIDEO CLIP)

KURTZ: But The Enquirer, with that telltale photo, continued to report that the former senator was the father of Rielle Hunter's baby. And Edwards continued to deny it until a report this week by NBC's Lisa Myers.

(BEGIN VIDEO CLIP)

LISA MYERS, NBC NEWS: Today, he is publicly embracing that child for the first time.

(voice-over): In a written statement provided exclusively to NBC News, Edwards says, "I am Quinn's father. I will do everything in my power to provide her with the love and support she deserves. It was wrong for me ever to deny she was my daughter, and hopefully one day, when she understands, she will forgive me."

(END VIDEO CLIP)

KURTZ: So, did the supermarket tabloid do what the mainstream media should have done?

Joining us now from New York is Barry Levine, executive editor of "The National Enquirer."

You told me the other day that you were going to enter these John Edwards stories for a Pulitzer Prize. Some media heavyweight saying Pulitzer Board never going to touch this because The Enquirer pays for information. What are the odds of you actually winning this thing?

BARRY LEVINE, EXECUTIVE EDITOR, "THE NATIONAL ENQUIRER": Well, Mr. Kurtz, I think that, first of all, it is great that we're even talking about "The National Enquirer" and Pulitzer together. There's obviously been a bit of groundswell of support for us from bloggers.

We worked very hard for two years to do this story. You know, John Edwards could have ended this thing very early. Instead, he wanted to delay it.

You know, we continued on. And this wasn't just paying for a tip and getting some information. This was two years of exhaustive reporting. You know, reviewing financial documents, cultivating sources, doing in-the-field stakeout work.

This was the type of reporting that we learned about back in journalism school. Every aspect of journalism came into reporting this story, and I think our reporters, photographers and researchers deserve this moment to be acknowledged by the Pulitzer committee.

KURTZ: All right. By the way, Sid Gissler, the administrator of the Pulitzer Board, told me that The Enquirer will not be eligible because you market yourselves as a magazine.

But let me move on to John Edwards.

For the last two years, roughly, he has denied paternity, he has denied this is his baby. Did you have doubts that you, at The Enquirer, would ever be able to prove this?

LEVINE: Well, I think initially, you know, when we first started working on this story, this was a man whose wife was battling cancer. This was a man who, in the polls, showed the public felt he had the best marriage of all the presidential candidates.

We really had to work overtime and develop multiple sources before our editors down in Florida allowed us to print this story. This was the type of story that continued to take work and work, and, you know, Edwards continued to deny it. He called it tabloid trash. He said we were making things up.

We stayed on the story. We tracked him down to a hotel in Beverly Hills in July 2008. And finally, when we confronted him, he ran into a men's room. He ran from our reporters. It was that moment, I believe, that John Edwards knew that this was up.

KURTZ: That will be great scene in the movie.

But once Edwards made the confession, or I should say the partial confession, on "Nightline" about the affair in the summer of 2008, do you think the mainstream media then did a more aggressive job in trying to find out about the money that was paid to keep her quiet and all the other elements of this tangled tale?

LEVINE: What's amazing to me, Mr. Kurtz, is that we were still alone on the story, for the most part. We still had to continue on.

We were looking in the trail of hush money. And over the past year, we developed three significant stories in 2009.

One was the fact that a federal grand jury had been convened to investigate this. John Edwards' attorney confirmed that a month later.

We then reported that a DNA test had been done in which he learned he was (ph) the child. And most significantly, recently, in December, we revealed the first legal document showing that John Edwards and Rielle Hunter were involved in a financial support battle over the child.

KURTZ: OK. Well, some big newspaper, including "The New York Times" and "The Washington Post" -- I worked on a couple of stories -- did try to at least follow the money trail.

In my view, Edwards -- let me get a brief answer from you on this -- was forced to do this, finally make this admission, because ABC's "20/20" is going to interview next week former aide to Edwards, Andrew Young, who came up with this cockamamie story that he was the father of the baby and now has recanted.

LEVINE: Yes. I mean, I think that the Andrew Young interview is significant.

Andrew Young had to go in front of the grand jury to testify and, of course, he didn't want to perjure himself. So he told the truth and now he's written this book. And what's amazing, in a quick clip the other day on ABC, Young say that John Edwards spent a million dollars as part of this cover-up, which is just an amazing amount of money.

KURTZ: Although some of that money coming from wealthy supporters of John Edwards.

The Enquirer -- also in the news this week, as you know, the photo of what you said was Tiger Woods coming out of a sex rehab clinic in Hattiesburg, Mississippi. That was played big. That was on the front page of "The New York Post."

Now a Web site called X-17 says that wasn't Tiger Woods at all. They published a picture of another guy coming out of that same Mississippi clinic that kind of looks like Tiger Woods.

So, were you right on this one?

LEVINE: We're absolutely right on this one, Mr. Kurtz. What's going on now is that there is lookalikes coming out of the woodwork. This story of Tiger Woods has just been one amazing revelation to another. And we caught him -- we were the first to report the cheating scandal. The mainstream media followed. Now we were the first to catch him in the clinic that he's in where he's trying to help himself. (CROSSTALK)

KURTZ: But who exactly would go to the trouble of making another black man who kind of looks like Tiger Woods and have him coming out of the clinic to try to discredit your photographic scoop?

LEVINE: Well, all I can tell you is, we don't know who was responsible for that, whether it was the Tiger Woods camp, whether it was the rehab center. But certainly, you know, the Tiger Woods' people, from the beginning, tried to discourage us greatly from running the first story. And what we realized was it was just the tip of the iceberg.

KURTZ: That is the understatement, perhaps, of the century as wee went from one mistress to two mistresses, to 10, 14. And who knows how much the final figure is?

Barry Levine, thank you very much for joining us from "The National Enquirer."

LEVINE: Thank you so much.

KURTZ: And up next, the White House returns to an attack launched right here on RELIABLE SOURCES.

Plus, "The New York Times" says the free ride is over.

And a personal confession before I become tabloid fodder.

Our "Media Minute" straight ahead.

(COMMERCIAL BREAK)

KURTZ: Remember when Anita Dunn came on this program and ripped Fox News? Of course you do.

Now her successor as White House communications director, Dan Pfeiffer, is firing at the same target.

(BEGIN VIDEOTAPE)

DAN PFEIFFER, WHITE HOUSE COMMUNICATIONS DIRECTOR: I have the same view of Fox that Anita had, which is that Fox is not a traditional news organization. They have a point of view.

That point of view pervades the entire network, both the opinion shows like Glenn Beck and Bill O'Reilly, but also through the newscaster in the day. We don't feel an obligation to treat them like we would a CNN or an ABC or an NBC or a traditional news agency.

KURTZ (voice-over): (INAUDIBLE), and we all remember how well that turned out. As newspapers scramble for a way to stop giving away their content online, "The New York Times" has made a decision. Publisher Arthur Sulzberger says it will start charging readers, if they aren't already subscribers, after a certain number of articles are viewed for free. This metered approach is a big gamble but doesn't take effect until 2011.

(END VIDEOTAPE)

KURTZ: Now, I have a confession to make. I didn't want to talk about this, but it will probably leak out. And I just need to get out in front of it.

I was in a women's bathroom with Lara Logan. And once I learned that the paparazzi had taken photos, I figured it was only a matter of time before some blog got a hold of it and my reputation would be in tatters, especially since Lara's pregnant.

Oh, and there were two other women in there. But never mind.

Now, I have a perfectly innocent explanation. I had gone to appear on the "CBS Evening News." Let's show the video so you know this isn't just a cover story.

But when I got to the Washington bureau, there was no makeup person around. And trust me, I needed some.

So CBS's chief foreign correspondent graciously agreed to powder my face with some of her cosmetics, and we didn't have a mirror, so we slipped into the nearest available space, and only later did I realize this might make it into the tabloids.

That's my story and I'm sticking to it.

You know, for some reason, the stuff looks a lot better on her.

Still to come, pulling the plug on Air America. Why can't the left get traction in a radio market dominated by Rush and the right?

(COMMERCIAL BREAK)

KURTZ: When Air America Radio launched nearly six years ago, the venture got a good dose of media hype. A bit of it from me.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): Here, after all, was an attempt to gain a liberal foothold in a medium dominated by such hard-charging conservatives as Rush Limbaugh, Sean Hannity, Glenn Beck and Laura Ingraham. It ended in failure this week when Air America said it is shutting down and filing for bankruptcy.

The company made mistakes, beginning with its decision to buy entire stations. In the end, it produced two stars, Al Franken, who used his program as a springboard to win a Senate seat in Minnesota, and Rachel Maddow, who used to appear on this program and became famous after landing her own show on MSNBC. There are still some popular liberal yackers on the radio, such as Ed Schultz and Stephanie Miller, but they are way outnumbered in Limbaugh land.

(END VIDEOTAPE)

KURTZ: Talk radio has long attracted listeners who are dissatisfied with a media establishment they see as liberal. Air America tried to change that, but the market has spoken.

Well, that's it for our RELIABLE SOURCES hour. Thank you for watching.